Some Towson residents, alarmed by a Baltimore County proposal to give nearly $43 million to the developers of the Towson Row project, plan to press officials for answers at a Tuesday County Council meeting.
Since learning about the incentive package last week, many residents have been connecting over Facebook, NextDoor and email, and coordinating plans to attend the meeting where council members will discuss the deal to jump start the York Road development.
“People want to know: What is this?” said Brenda Bodian, a resident of Towson’s Stoneleigh neighborhood and a commercial real estate professional. “It comes as a great shock that there’s $43 million that can be given to a private developer.”
Under the proposal from Baltimore County Executive Kevin Kamenetz, the county would give $42.9 million to developers Caves Valley Partners and Greenberg Gibbons over the next five years.
The companies want to build a 1.2 million-square-foot development in downtown Towson with an office tower, apartments, student housing, a hotel, garage and retail shops anchored by a Whole Foods store.
Bodian said residents have questions about whether the proposal is a good financial move for county taxpayers, and many are frustrated that few details are available about the proposed deal.
“Clearly it came out without any discussion of a process for what the request was, how it is going to be financed and what’s the payback,” she said.
Caves Valley first proposed the Towson Row project in 2013, but, after it demolished buildings to prepare the site in 2015, work there stalled. Earlier this year, the Towson-based developer brought in Greenberg Gibbons as a co-developer.
Officials with Owings Mills-based Greenberg Gibbons say the project needs the financial assistance from the county in order to secure funding from its main investor, a pension fund in California.
“If we don’t get it, we don’t go forward,” said Brian Gibbons, chairman and CEO of Greenberg Gibbons.
Under the proposal, the developers would receive $26.5 million related to property taxes and $16.4 million related to hotel taxes.
The developers agreed to forego two tax breaks they would be eligible for — the county’s Commercial Revitalization Tax Credit and a High Performance Building Tax Credit. Those credits would have reduced Towson Row’s property tax bill down the line, but instead the developers would pay full property taxes.
The difference will add up to $26.5 million over 10 to 12 years, effectively repaying that portion of the county’s assistance.
The county linked the rest of the assistance package — $16.4 million — to hotel taxes. Once the Towson Row hotel is up and running, it is expected to generate $16.4 million in hotel taxes over 20 years, according to the county.
The taxes, paid by hotel guests, are partially earmarked for marketing and tourism and also help fund the county operating budget.
The council work session to discuss the plan is scheduled for 2 p.m. Tuesday in Towson. A vote on the package could come at the council meeting Dec. 18.
West Towson resident Mark Lee said he’s never been very politically active before, but his concerns about the Towson Row deal are motivating him to attend Tuesday’s work session.
“It just smells,” he said.
Lee questions whether it’s fair for taxpayers to have to lay out money to help developers who didn’t foresee problems with the project.
“That just seems like a major oversight and now county residents are paying for it,” he said. “I just have a real problem with that.”
Ty Ford, who lives in Towson’s Ruxton neighborhood, said there’s been “unnecessary obfuscation” from county government.
“I’m sitting back going: How did we get to a place where $43 million is going to be a give-back to the developers to get us out of here?” Ford said. “Something is horribly wrong and there needs to be much greater transparency.”
A broad outline of the financial assistance package was first announced in a county press release the day after Thanksgiving. Documents related to the deal were posted on the county’s website this past Friday following inquiries from The Baltimore Sun.
The council usually posts reports from its auditor on contracts and fiscal matters a few days prior to the work session where they will be discussed. But Council Chairman Tom Quirk said the auditor report on the Towson Row proposal was delayed because the staff sought further information from the Kamenetz administration.
The auditor’s report was not posted online as of Monday evening.
“The goal of the administration and County Council, candidly, is to make sure all the information is out there for everyone to see,” said Quirk, a Catonsville Democrat. “Transparency is important.”
Kamenetz, a Democrat who is running for governor, has declined interview requests about the financial assistance for Towson Row, but in a statement released through a spokeswoman, he said: “An independent economic impact study makes it very clear. Towson Row is a $350 million private investment in downtown Towson that will generate 2,000 permanent jobs, 3,500 construction jobs and $220 million in annual business sales in Baltimore County.”
Kamenetz referenced a report the county commissioned from Sage Policy Group that supports the need for a “public-private partnership” in order to make Towson Row a reality. The county paid Sage $9,600 for the study.
Bodian questioned how the county can afford to give money up front to developers at the same time that residents are told money is tight when it comes to county funding for projects such as new schools.
“This is tax money that all of us across the county have been paying for basic services, for schools, for roads, for infrastructure upgrades that need to be done — but there’s not enough money,” she said.
Klaus Philipsen, an architect who writes a blog about development issues in the Baltimore region, said there’s a lack of transparency in the Towson Row deal.
“The information that is available is extremely scarce, except for that press release of the day after Thanksgiving. There really is no information,” he said.
Philipsen said in addition to information about the projections for the developer paying back the county, council members and the public need to know more about the financial viability about the Towson Row project overall.